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Financial Release

04/11/18

Lower Shipments in Asia/Pacific and the U.S. Drag Down Global
Results

STAMFORD, Conn.--(BUSINESS WIRE)--Apr. 11, 2018--
Worldwide PC shipments totaled 61.7 million units in the first quarter
of 2018, a 1.4 percent decline from the first quarter of 2017, according
to preliminary results by Gartner, Inc. The PC market experienced a 14th
consecutive quarter of decline, dating back to the second quarter of
2012.

Asia/Pacific and the U.S. experienced declining shipments, while other
regions saw some minimal growth, but it was not enough to drive overall
growth for the PC industry. In the first quarter of 2018, PC shipments
in Asia/Pacific declined 3.9 percent compared with the same period last
year, while shipments in the U.S. decreased 2.9 percent.

"The major contributor to the decline came from China, where unit
shipments declined 5.7 percent year over year," said Mikako
Kitagawa, principal analyst at Gartner. "This was driven by China's
business market, where some state-owned and large enterprises postponed
new purchases or upgrades, awaiting new policies and officials'
reassignments after the session of the National People's Congress in
early March.

"In the first quarter of 2018, there was some inventory carryover from
the fourth quarter of 2017," Ms. Kitagawa said. "At the same time,
vendors were cautious in overstocking due to the upcoming release of new
models in the second quarter of 2018 with Intel's new eighth-generation
core processors."

The top three vendors — HP, Lenovo and Dell — accounted for 56.9 percent
of global PC shipments in the first quarter of 2018, compared with 54.5
percent of shipments in the first quarter of 2017 (see Table 1). Dell
experienced the strongest growth rate among the top six vendors
worldwide, as its shipments increased 6.5 percent.

Notes: Data includes desk-based PCs, notebook PCs and ultramobile
premiums (such as Microsoft Surface), but not Chromebooks or iPads. All
data is estimated based on a preliminary study. Final estimates will be
subject to change. The statistics are based on shipments selling into
channels. Numbers may not add up to totals shown due to rounding.Source:
Gartner (April 2018)

HP Inc.'s worldwide PC shipments increased 2.8 percent in the first
quarter of 2018 versus the same period last year. In EMEA, HP Inc.
recorded double-digit growth in both desktop and mobile PCs. This was
contrasted with a small decline in other regions. HP Inc. was adversely
impacted by declining demand in the U.S., which generally accounts for
one-third of its total shipments.

After record holiday sales for consumer and gaming products in the
fourth quarter of 2017, Dell continued to perform well in the first
quarter of 2018. With double-digit shipment increases in EMEA, North
America and Latin America, Dell grew in all regions except Asia/Pacific.
Desktop and mobile PCs grew in equal measures, showing Dell's strength
in the business segment.

Rising ASPs

The average selling prices (ASPs) of PCs continue to rise. Acknowledging
deceleration in the smartphone market, and uncertainty in PC replacement
demand, component companies remain cautious about expanding their
production capabilities. Therefore, persistent component shortages and a
rising bill of materials continue to create an environment conductive to
higher prices.

"In contrast to other DRAM-related price spikes, PC vendors are not
reacting by reducing DRAM content. Rather they have passed the cost
increase to consumers," Ms. Kitagawa said. "With fewer people buying new
machines, manufacturers need to get the highest profit margin from each
sale. To do that, they are raising the selling points and focusing on
customer experience or perception of value."

Regional Overview

In the U.S., PC shipments totaled 11.8 million units in the first
quarter of 2018, a 2.9 percent decrease from the first quarter of 2017.
Dell moved into the No. 1 position in the U.S. based on shipments, as
its market share increased to 29.1 percent. HP Inc. moved into the No. 2
position as its shipments declined 4.8 percent, and its market share
totaled 28.4 percent in the first quarter of 2018.

Notes: Data includes desk-based PCs, notebook PCs and ultramobile
premiums (such as Microsoft Surface), but not Chromebooks or iPads. All
data is estimated based on a preliminary study. Final estimates will be
subject to change. The statistics are based on shipments selling into
channels. Numbers may not add up to totals shown due to rounding.Source:
Gartner (April 2018)

PC shipments in EMEA totaled 18.6 million units in the first quarter of
2018, a 1.7 percent increase year over year. Enterprise shipments
increased as many Windows 10 projects that were put on hold in 2017
began to be implemented. The fast approach of the compliance deadline
for the General Data Protection Regulation (GDPR) in Europe, as well as
earlier reports of cybersecurity breaches, made security a strong
priority in the hardware refresh cycle among enterprises. Eurasia
continued to be a bright spot for EMEA, as several countries, such as
Russia, Ukraine and Kazakhstan, saw strong demand in the first quarter
of 2018.

PC shipments in Asia/Pacific totaled 21.9 million units in the first
quarter of 2018, a 3.9 percent decline from the first quarter of 2017.
As previously mentioned, the PC market in China drove the decline in
Asia/Pacific. There is no significant sign of strong upgrading to the
special version of Windows 10 from the Chinese government institutions.
Consumer demand was weak as most buyers already took advantage of the
aggressive promotions offered in the fourth quarter of 2017.

These results are preliminary. Final statistics will be available soon
to clients of Gartner's PC Quarterly Statistics Worldwide by Region
program. This program offers a comprehensive and timely picture of the
worldwide PC market, allowing product planning, distribution, marketing
and sales organizations to keep abreast of key issues and their future
implications around the globe.

About Gartner

Gartner, Inc. (NYSE: IT), is the world's leading research and advisory
company and a member of the S&P 500. We equip business leaders with
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To learn more about how we help decision makers fuel the future of
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